Research On Risk Assessment Of Material Misstatement Of Financial Statements Based On Entropy Weight-TOPSIS Method

Under the situation of economic globalization and international convergence of auditing standards,China has actively integrated with international auditing standards in the revision of auditing standards,accelerated the revision of auditing standards suitable for China’s market conditions,and the core of the revision is still the risk of material misstatement.With the stimulation of market vitality,whether it is with foreign countries,or the deepening of exchanges and cooperation between the country itself,the scale of China’s capital market has gradually expanded,accompanied by many problems,so to ensure the healthy development of the market,sustained economic prosperity is an important issue at present.The audit of listed companies by accounting firms is a crucial part of this,and as the core of modern risk-oriented auditing,the assessment results of material misstatement risks are directly related to the advancement of the entire audit process,and ultimately affect the effectiveness of audit opinions.Therefore,this paper combines specific cases to study the assessment of the risk of material misstatements in the financial statements of accounting firms.Based on the research results of relevant literature,this paper takes the financial statement audit of K company by R as an example,and uses the entropy-TOPSIS method to conduct research on the risk assessment of major misstatement at the financial statement level in the financial statement audit.First,in the introduction section,the research background and significance and the relevant research and collation of the risk of material misstatement in financial statements at home and abroad are introduced;secondly,the relevant concepts and theoretical basis of the risk of material misstatement in financial statements are introduced;third,taking the audit of the financial statements of company K by R as an example,using the entropy-TOPSIS method,in the empowerment of evaluation indicators,quantitative risk assessment of material misstatement of financial statements,and ranking the size of the risk,combined with horizontal and vertical comparisons,It was concluded that the risk of material misstatement in K’s financial statements from 2015 to2018 was increased year by year by using this method,which was consistent with the actual situation and could play a predictive and warning role in auditing practice.Finally,combined with the actual situation and evaluation results,in terms of risk prevention of material misstatement in the financial statements of R,suggestions for improvement are made from the internal level,namely,certified public accountants and accounting firms,and at the external level,from the level of the audited unit and the level of relevant regulatory units.